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The SEC has again given an award to a whistleblower. This time it totals $3.5 million, and comes after multiple instances of support from the individual. The whistleblower’s contribution prompted SEC staff to investigate more possible securities violations. This made the investigation easier for the SEC staff, which saved them time and resources. The additional information also helped with the whistleblower’s discussion of settlement. Not one, but two SEC enforcement actions were successful as a result of the whistleblower’s assistance and cooperation. The second enforcement action came from the same “nucleus of operative facts”  as the first action.The SEC has again given an award to a whistleblower. This time it totals $3.5 million, and comes after multiple instances of support from the individual.

The whistleblower’s contribution prompted SEC staff to investigate more possible securities violations. This made the investigation easier for the SEC staff, which saved them time and resources. Continue reading

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Most whistleblowers are keen to keep their activity concealed and private until the information becomes public. In an unusual twist, one whistleblower decided to publish a research report online detailing the fraudulent activity of a company and that of its CEO prior to notifying the SEC of the fraud. Within days of sharing this information online, the whistleblower then shared the same information with the SEC. The individual was persistent in reaching out to SEC staff about this information. Their continued contact led to the SEC opening an investigation that resulted in a successful enforcement action. This whistleblower was an outsider, not an employee of the company. Without admitting or denying the findings, the Company and its CEO consented to the SEC’s order that required the Company to pay restitution as well as other remedies Ultimately, defrauded investors saw the return of millions of their dollars.Most whistleblowers are keen to keep their activity concealed and private until the information becomes public. In an unusual twist, one whistleblower decided to publish a research report online detailing the fraudulent activity of a company and that of its CEO prior to notifying the SEC of the fraud.

Within days of sharing this information online, the whistleblower then shared the same information with the SEC. The individual was persistent in reaching out to SEC staff about this information. Their continued contact led to the SEC opening an investigation that resulted in a successful enforcement action. This whistleblower was an outsider, not an employee of the company. Continue reading

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Through three orders, the SEC issued awards to four people that totaled over $40 million. In the first proceeding, the SEC awarded two individuals a bounty of $37 million that provided crucial evidence leading to the success of the covered action. One individual helped SEC staff understand the evidence provided, and led to additional relevant information. The continuing assistance of both gave staff more information that helped to advance the investigation. Another governmental agency was involved with this action with its own separate “covered action.” Both whistleblowers received 50% of the bounty amount. In the second proceeding, the SEC awarded one individual $1.8 million for the new information they provided that saw SEC staff open a new investigation into misconduct. The individual quickly offered an internal report, and continued to provide SEC staff with information, documentation, and other assistance throughout the investigation. Charges in the affiliated covered action were a direct result of this individual’s contributions, which caused them to suffer hardships as a result. In the third proceeding, a whistleblower received an SEC bounty of $1.5 million for information and assistance in an existing investigation that led to a successful enforcement action. As with the previous two, this individual gave continued and substantial assistance to SEC staff throughout the investigation. This whistleblower provided new information that saved staff time and resources and helped staff to understand the issues involved.Through three orders, the SEC issued awards to four people that totaled over $40 million.

  • In the first proceeding, the SEC awarded two individuals a bounty of $37 million that provided crucial evidence leading to the success of the covered action. One individual helped SEC staff understand the evidence provided, and led to additional relevant information. The continuing assistance of both gave staff more information that helped to advance the investigation. Another governmental agency was involved with this action with its own separate “covered action.” Both whistleblowers received 50% of the bounty amount.
  • In the second proceeding, the SEC awarded one individual $1.8 million for the new information they provided that saw SEC staff open a new investigation into misconduct. The individual quickly offered an internal report, and continued to provide SEC staff with information, documentation, and other assistance throughout the investigation. Charges in the affiliated covered action were a direct result of this individual’s contributions, which caused them to suffer hardships as a result.
  • In the third proceeding, a whistleblower received an SEC bounty of $1.5 million for information and assistance in an existing investigation that led to a successful enforcement action. As with the previous two, this individual gave continued and substantial assistance to SEC staff throughout the investigation. This whistleblower provided new information that saved staff time and resources and helped staff to understand the issues involved.

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The Securities and Exchange Commission has kept busy, even through the holidays. On January 10th, 2022, the SEC put out a press release announcing that three more people have received bounties after working with SEC staff to identify and discontinue wrongdoing in the financial sector. The first whistleblower reported their concerns internally prior to notifying the SEC. This information contributed significantly to an existing investigation. The SEC was not previously aware of this misconduct. This whistleblower’s information assisted the staff in developing a well-organized and effective investigation leading to the enforcement action. The whistleblower kept in touch with the staff throughout the investigation to help uncover the full extent of misconduct as well as identify all possible witnesses. This information as well as other assistance also helped the SEC staff to obtain evidence of wrongdoing that was occurring overseas. Without this information from the whistleblower, the activity would have been difficult to uncover. In this case, the first whistleblower received an award of $2.6 million.The Securities and Exchange Commission has kept busy, even through the holidays. On January 10th, 2022, the SEC put out a press release announcing that three more people have received bounties after working with SEC staff to identify and discontinue wrongdoing in the financial sector. Continue reading

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The SEC has announced its latest whistleblower awards for two individuals in the same case. The first whistleblower received a bounty of more than $12.5 million after alerting the SEC to an ongoing fraudulent scheme. As a result, SEC staff initiated an investigation and the whistleblower offered continued support to them. The second whistleblower received more than $2.5 million. This individual’s information was more “limited in nature,” but was also significant in the eventual enforcement action. The information from both whistleblowers was original and submitted voluntarily. Information from both whistleblowers was substantial in nature and led to the successful SEC enforcement action. The amounts reflect the amount of contribution each offered. The order called the first whistleblower’s contribution “more significant.”The SEC has announced its latest whistleblower awards for two individuals in the same case.

The first whistleblower received a bounty of more than $12.5 million after alerting the SEC to an ongoing fraudulent scheme. As a result, SEC staff initiated an investigation and the whistleblower offered continued support to them. Continue reading

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A whistleblower whose original information led to an investigation by the U. S. Department of Justice (DOJ) has also received a bounty of $2M from the Securities and Exchange Commission (SEC). Recent amendments to the whistleblower rules mean that DOJ actions, such as deferred and non-prosecution agreements, are now subject to whistleblower awards. The whistleblower also offered original information to both the SEC and the DOJ, as well as “extensive, ongoing assistance to both investigations.”  Both agencies opened their investigations based upon the whistleblower’s information and assistance.A whistleblower whose original information led to an investigation by the U. S. Department of Justice (DOJ) has also received a bounty of $2M from the Securities and Exchange Commission (SEC).

Recent amendments to the whistleblower rules mean that DOJ actions, such as deferred and non-prosecution agreements, are now subject to whistleblower awards. Continue reading

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You may be an eligible whistleblower entitled to a reward if you voluntarily provide original information to the Securities and Exchange Commission (SEC) or other federal agency that leads to the SEC’s issuance of sanctions of one million dollars ($1,000,000) or more. But what do those “voluntarily” and “original” requirements mean in practice? Are they significant enough to worry about? Let’s start with that second question first. Yes, meeting these standards is essential: If your information does not meet either the voluntary or the original standards, then you will not be eligible for an SEC award. What’s “Voluntary”? Under Rule 240.21F-4, “voluntary” means that you give your information to the SEC or a similar federal enforcement entity before anyone from the federal government has asked you to turn over that type of information. And importantly, their request does not need to rise to the level of a subpoena or something formal; an informal request is enough. Also, with only a few exceptions, giving the SEC information is not considered voluntary, if you are already required to reveal this information in the context of compliance—i.e., if you’re must provide that information as part of your normal job duties.You may be an eligible whistleblower entitled to a reward if you voluntarily provide original information to the Securities and Exchange Commission (SEC) or other federal agency that leads to the SEC’s issuance of sanctions of one million dollars ($1,000,000) or more. But what do those “voluntarily” and “original” requirements mean in practice? Are they significant enough to worry about? Continue reading

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If you’re deciding to become a whistleblower, there are a number of issues that you should consider. The first of these is to know that just because you provide information to the Securities and Exchange Commission (SEC) about a potential securities violation, that does not mean that you are automatically eligible to receive a whistleblower award. So let’s look at what it takes for you to be considered “an eligible whistleblower” (i.e., someone eligible for an award). You are likely eligible for an award if: You are voluntarily providing original information to the SEC or another federal enforcement agency Your information reveals a potential SEC violation Your information either triggers a new SEC investigation or has a significant impact on an ongoing investigation The SEC issues more than $1 million in sanctions because of the information you uncovered Importantly, two factors that do not affect your eligibility are your citizenship and your employment. You do not have to be a U.S. citizen to be eligible. You can be from anywhere and live anywhere (and the sanction doesn’t have to have taken place on U.S. soil, either). Additionally, you don’t have to be an official or employee of the company to make a report.If you’re deciding to become a whistleblower, there are a number of issues that you should consider. The first of these is to know that just because you provide information to the Securities and Exchange Commission (SEC) about a potential securities violation, that does not mean that you are automatically eligible to receive a whistleblower award. So let’s look at what it takes for you to be considered “an eligible whistleblower” (i.e., someone eligible for an award). Continue reading

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On September 24, 2021, the Securities and Exchange Commission (SEC) announced that it awarded roughly $36 million to a whistleblower who provided information and assistance that “significantly contributed to the success of an SEC enforcement action as well as actions by another federal agency.” The other agency was not named, and limited information was provided in order to protect the identity of the whistleblower. According to the SEC’s press release, the whistleblower gave information on an illegal scheme that was crucial to the government. The whistleblower met with the SEC’s and the other agency’s staff multiple times and identified “key documents and witnesses.” “Today’s whistleblower brought valuable new information to the attention of the SEC and to another federal agency, greatly assisting ongoing investigations…Whistleblowers can act as a springboard for an investigation or, like here, they can propel forward an already existing investigation,” said Emily Pasquinelli of the SEC’s Office of the Whistleblower. As of this writing, the SEC has awarded about $1.1 billion to 214 people since it first issued an award in 2012. Whistleblowers are not paid with money from harmed investors, but from sanctions paid to the SEC by violators of securities laws.On September 24, 2021, the Securities and Exchange Commission (SEC) announced that it awarded roughly $36 million to a whistleblower who provided information and assistance that “significantly contributed to the success of an SEC enforcement action as well as actions by another federal agency.”

The other agency was not named, and limited information was provided in order to protect the identity of the whistleblower. Continue reading

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